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TJX Tops Profit Targets

The discount retailer lifts its full-year guidance.
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TJX Cos.

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posted a sharp drop in second-quarter earnings as its profit was hit by charges from a data breach, but its results before the charge beat both its own and Wall Street's estimates.

The Framingham, Mass.-based owners of stores such as Marshalls and T.J. Maxx said its net income for the quarter fell to $59 million, or 13 cents a share, from $138.2 million, or 29 cents a share, a year earlier.

The profit was pulled down by a charge of $118 million, or 25 cents a share, tied to a hacking incident into its customers' credit cards accounts.

Excluding the charge, earnings per share jumped 31% to 38 cents. TJX last week had projected earnings at the high end of its prior forecast of 34 cents to 36 cents; analysts had an average estimate for EPS of 37 cents.

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Sales jumped to $4.32 billion from $3.96 billion. Wall Street expected revenue of $4.33 billion.

Same-store sales, or sales at stores open at least a year, climbed 4%.

"Importantly, virtually all of our businesses delivered significant top- and bottom-line improvement that was in line with or above our plan," said Carol Meyrowitz, president and CEO of TJX. "Quarterly pretax profit margins continue to benefit from strong comp sales as well as our focus on cost reduction, trends that began in late 2005."

For the current quarter, the company projected earnings from continuing operations of 53 cents to 55 cents a share. Analysts, on average, predict earnings of 55 cents a share, according to Thomson Financial.

TJX lifted its full-year profit forecast, predicting fiscal-year earnings of $1.84 to $1.88 a share, excluding items. Previously, the company projected earnings of $1.80 to $1.85 a share.

Analysts expect a profit of $1.86 a share for the year ending in January.